Interaction between monetary and fiscal policy in Algeria: an application of a model with markovian regime switching


Abderrahim CHIBI Sidi Mohamed CHEKOURI Mohamed BENBOUZIANE


The aim of this paper is to analyze the dynamic interaction between monetary and fiscal policies in Algeria for the period of 1963-2017. First, we examined the nature of fiscal policies in Algeria using a Structural vector Autoregression model. The results provide evidence of a non-Ricardian fiscal policy in Algeria (validity of the fiscal theory of the price level). Further, the paper analyzes the interactions between monetary and fiscal policie